The Bank of Ghana’s (BOG) annual fraud report for 2023 has revealed a rise in fraudulent activities across the banking, specialized deposit-taking institutions (SDIs), and payment service providers (PSPs) sectors, highlighting vulnerabilities within the financial landscape.
According to the report, fraud cases surged by 5% in 2023, reaching 15,865 incidents, compared to 15,164 cases recorded in 2022. Additionally, total financial losses due to fraud increased by 7%, amounting to approximately GH¢88 million, up from GH¢82 million in the previous year.
The 2023 report identified a sharp increase in fraudulent withdrawals from customers’ accounts, cyber and email fraud, cash theft, and SIM-swap-related fraud. The latter involves the hijacking of mobile phone numbers linked to bank accounts, leading to unauthorized transactions. This type of fraud particularly targets users with mobile banking apps linked to mobile money wallets.
Despite a 59% decline in attempted fraud cases across the banking and SDI sectors, the total loss value from successful frauds increased significantly to GH¢72 million in 2023—a 29% jump from 2022. The report attributes this rise to a few large fraud cases involving foreign currency transactions, which, when converted into Ghana Cedi, greatly inflated the overall loss.
The PSP sector also witnessed an increase in the number of fraud cases, recording 14,655 incidents in 2023, a 20% rise from the previous year. However, the financial losses in this sector decreased by 38%, with GH¢16 million lost in 2023 compared to GH¢26 million in 2022.
According to the report, banks reported a total of 969 fraud cases in 2023, a 17% drop from the 1,163 cases in 2022. However, the financial impact of these frauds was severe, with banks losing approximately GH¢63 million, a 21% increase from the previous year. The most prominent fraud types were cash theft, cyber or email fraud, fraudulent withdrawals, forgery and manipulation of documents, and cheque fraud.
Cash theft alone caused losses of GH¢14.8 million in 2023, a dramatic increase from GH¢1 million in 2022. The report noted that this rise was driven by a few large-scale incidents involving foreign currency theft. For instance, one case involved the theft of USD 466,000 from a universal bank, which significantly contributed to the overall increase in losses.
SDIs also faced substantial challenges, reporting 241 fraud cases in 2023 a sharp decrease of 87% from the 1,835 cases reported in 2022. Despite the decline in the number of cases, SDIs experienced a 98% increase in fraud-related financial losses, with total losses rising to GH¢8.7 million in 2023.
A concerning trend cited in the report is the rising involvement of bank and SDI staff in fraudulent activities. In 2023, 274 staff members were implicated in fraud cases, representing a 46% increase from the 188 staff members involved in 2022. The majority of these cases 77% involved cash theft.
The Bank of Ghana emphasized the need for banks and SDIs to strengthen internal controls and due diligence processes during staff recruitment, as well as to provide continuous training on professional conduct and ethics.
The growing use of electronic money (e-money) and mobile financial services has led to an increase in fraud cases within the PSP sector. In 2023, PSPs recorded a 36% rise in e-money transaction volumes and a 90% increase in the value of transactions, reaching GH¢1.9 trillion. Despite this growth, the sector saw a decline in financial losses due to fraud, down from GH¢26 million in 2022 to GH¢16 million in 2023.
Fraudsters primarily used social engineering tactics to deceive PSP customers, leading to a rise in SIM-swap-related fraud. The Bank of Ghana urged PSPs to adopt stricter security measures, such as multi-factor authentication and enhanced fraud detection systems, to combat the growing threat.
In response to the increasing fraud incidents, the Bank of Ghana introduced several directives aimed at curbing fraud in the banking sector.
The Central Bank according to the report introduced enhancing security features in electronic banking systems to prevent unauthorized access, Strengthening Know-Your-Customer (KYC) procedures during account onboarding, mandating banks to disable auto log-ins on mobile banking application, and requiring secure codes for every login, and collaborating with law enforcement to ensure stiffer penalties for staff members involved in fraud.
